Based on the regulations of Article 362, Section 5 of Company Law, the Board of Directors formulated the following plan for constructing an internal control system at the meeting held on May 31, 2006.
In an effort to maintain fairness, transparency, and efficiency of our business operation as well as to enhance the overall corporate quality, we shall continuously ensure the effectiveness of our internal control system.
| 1) |
The Board of Directors shall comprise of full-time and part-time directors. It shall resolve significant issues based on the regulations set forth by the Board of Directors and the deliberation standard. The Board shall also supervise its directors for the appropriate operational execution of the laws and regulations prescribed by it. |
| 2) |
Information related to the directors’ operations shall be stored and managed properly in accordance with the internal regulations. |
Based on the executive officer system, we shall transfer authority and clarify our responsibilities. Furthermore, we shall also execute operations effectively and efficiently.
In addition to the items deliberated by the Board, significant items related to the operational execution shall be deliberated and resolved by the directors and executive officers in the management meeting.
| 3. |
System to ensure the effectiveness of operations executed by auditors |
| 1) |
In addition to the Board of Directors’ meetings, auditors shall be entitled to attend important internal meetings. |
| 2) |
The directors and internal control section shall facilitate the auditors by collaborating and providing appropriate and timely information to them. |
| 3) |
Staff members shall be placed in the Internal Control Section to support the auditors’ duties. These members are selected after taking into consideration the opinions of the auditors. |
| 1. |
All title-holders shall always maintain a high sense of ethics and appropriately execute operations in accordance with the “KDDI Evolva Action Guidelines”. These prescribe basic regulations that need to be honored while executing operations. |
| 2. |
The following systems shall work in conjunction with one another and ensure compliance. |
| 1) |
We shall attempt to identify illegal matters, serious problems and accidents as early as possible and offer solutions at meetings designed to deal with corporate ethics and compliance issues. |
| 2) |
We shall appropriately operate and ensure an internal reporting system related to compliance that is available to employees as well as to the public. |
| 3) |
We shall attempt to comprehend and enhance compliance by providing internal and external training to the staff and conducting awareness programs. |
We shall regularly screen any meeting entities comprising of directors and others in order to preclude potentially risky information. Furthermore, every section, division, and title-holder shall work in close liaison with each other. Their work shall revolve around the Internal Control Section. Collectively, they shall engage in a unified control of risk management, i.e., manage risk of KDDI Evolva optimally while attempting to efficiently achieve management targets based on the internal regulations.
| 1) |
We shall devise appropriate management strategies and plans through an analysis of business risks. In addition, we shall clearly prioritize operations at the management strategy meetings in order to ensure continuous development. In order to implement these plans, we shall examine business risks at monthly meetings and shall strictly control operations. |
| 2) |
Every title-holder shall regard all stakeholders as company’s customers and shall thereby attempt to improve their satisfaction through total customer satisfaction (TCS) activities.
We shall evaluate and improve TCS at meetings such as the management council meetings in order to promote TCS and ensure quick and satisfactory responses to the customers.
Through this corporation-wide attempt, we shall aim to gain customers’ support and trust, further improve TCS, and reinforce and expand the customer base. |
| 3) |
We shall maintain and complete the internal control system relating to the improvement of financial reporting. |
| 4) |
We strongly recognize ourselves as a company that holds personal information of our customers, employees, and staff. As such, we regard social responsibility as our highest concern. We develop and maintain compliance programs based on personal information protection principles, related laws and other principles protecting confidential information and data pertaining to telecommunications. We continuously improve and maintain these programs while providing training to our employees. |
We position auditors in the Internal Control Section and perform internal audits on our entire organization and operation. In addition, we regularly inspect the appropriateness and validity of our business operations and internal control system. The result of the internal audit is reported to the President and auditors with improvement and resolution proposals.
In order to maintain optimal operation for the whole KIDDI group, we shall maintain a congruous association with KDDI by regularly sharing and consulting with regard to information related to the important items of business management.
While respecting subsidiaries as independent entities, we convene regular meetings to receive updates on their operations or to discuss and coordinate critical matters. We also dispatch directors and auditors to subsidiaries in order to supervise their operations and accounting practices.
